Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

Deficiency judgments let creditors haunt borrowers for up to 20 years
St. Pete Times ^ | March 28, 2011 | Kris Hundley, Times Staff Writer

Posted on 03/28/2011 7:16:39 AM PDT by dawn53

Think of it as Act 2 of Florida's foreclosure crisis.

In the first act, borrowers lose their homes.

In the next, lenders come after them for the debt still owed.

Unlike a foreclosure, which homeowners dread but expect once they stop making payments, deficiency actions can sneak up on people who thought their problems were behind them when they handed over the house keys.

"People have no idea of all the trouble that's coming," said Margery Golant, a lawyer in Broward County who is handling a growing number of deficiency defense cases.

(Excerpt) Read more at tampabay.com ...


TOPICS: Business/Economy; News/Current Events
KEYWORDS:
Navigation: use the links below to view more comments.
first previous 1-2021-4041-6061-8081-95 next last
To: dawn53

“bank approved short sale, but were hit with a deficiency judgment”

Most States allow this. The bank can still claim you owe them the short sale difference. If you had a $100 mortgage but sold for $75, you owe the bank $25.

Also the bank can issue an IRS form 1099 if they write off that $25, claiming you basically were given $25 and must pay income tax on it.


41 posted on 03/28/2011 8:32:57 AM PDT by CodeToad (Islam needs to be banned in the US and treated as a criminal enterprise.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Outlaw Woman
There are (many) very good people who go into real estate, and I have no doubt you're one. But, for every real estate agent who puts a client ahead of a fee, there are, what?, a dozen?, a hundred?, who look only to their fees.

Another part of the problem, is that many (in my experience) real estate agents -- especially in states where attorneys are not regularly involved in real estate transactions -- do more harm than good because they don't really know the law (they're rarely attorneys in those states), and are too reluctant to refer a client to a real estate (or bankruptcy) lawyer when it would make sense. Sometimes, sadly, the most well-meaning are the most dangerous because they want to give good advice, but the advice is either wrong, or incomplete.

42 posted on 03/28/2011 8:34:51 AM PDT by CatoRenasci (Ceterum Censeo Persae Esse Delendam -- Forsan et haec olim meminisse iuvabit)
[ Post Reply | Private Reply | To 30 | View Replies]

To: HereInTheHeartland

‘Market rate is now higher for everyone. Check out what PMI has done in the past couple of years for example. “

Well perhaps we should all do a class action against the banks for the fraudulent, illegal, and downright stupid business practices they had for the last 10 years.


43 posted on 03/28/2011 8:35:35 AM PDT by driftdiver (I could eat it raw, but why do that when I have a fire.)
[ Post Reply | Private Reply | To 40 | View Replies]

To: CodeToad

The IRS was forgiving 1099’s from banks last year.


44 posted on 03/28/2011 8:38:21 AM PDT by driftdiver (I could eat it raw, but why do that when I have a fire.)
[ Post Reply | Private Reply | To 41 | View Replies]

To: driftdiver

“we should all do a class action against the banks for the fraudulent, illegal, and downright stupid business practices they had for the last 10 years.”

Well not being argumentative; but what have they done to hurt you?

Bottom line is that the market place has cleaned up most of the problems already in my opinion.


45 posted on 03/28/2011 8:41:30 AM PDT by HereInTheHeartland (Yes We Can, have smaller government)
[ Post Reply | Private Reply | To 43 | View Replies]

To: Notwithstanding

Just deed the property back to whoever the assigns is and walk. There is no foreclosure so there can be no deficit. Make sure you take lots of pictures of the property with witnesses when you leave, and call the local cops and inform them it is vacant.


46 posted on 03/28/2011 8:46:08 AM PDT by org.whodat
[ Post Reply | Private Reply | To 12 | View Replies]

To: NonValueAdded
"There is a way you can ask the bank to waive or forgive the deficiency as part of the short sale but if not done properly, it sets up a big slug of taxable “income.” "

As of end of 2007, Chuckie Schumer law, which was retroactive, any deficiency forgiven as unpaid debt on primary residence under $500K is NOT taxable income.

I know because it happened to me.
47 posted on 03/28/2011 8:48:57 AM PDT by time4good
[ Post Reply | Private Reply | To 10 | View Replies]

To: driftdiver
The IRS was forgiving 1099’s from banks last year.

Cancellation of debt income will be in effect through 2012, but ONLY on mortgages for personal residences. Check the regs, as the amount is limited.

48 posted on 03/28/2011 8:51:26 AM PDT by Night Hides Not (If Dick Cheney = Darth Vader, then Joe Biden = Dark Helmet)
[ Post Reply | Private Reply | To 44 | View Replies]

To: Outlaw Woman

Best rule of thumb, never trust a realtor, they misrepresent both sides, and are in it for the money. Hire an attorney in a short sell. Never let they property go to foreclosure, deed it back.


49 posted on 03/28/2011 8:51:51 AM PDT by org.whodat
[ Post Reply | Private Reply | To 21 | View Replies]

To: CatoRenasci

You’re right. I’ve worked with Realtors that are dumb as a box of rocks and will say/do anything while keeping an eye on only their ‘fee’ ‘commission’.

The first thing I have done (not too active at the moment) regarding a short sale is to prepare the client(s)mentally and tell them that I am neither an attorney nor a CPA and that they should seek the advice of those professions. However, there are some things that Realtors can do and should do (imo).

The real estate industry is just as responsible for the current condition of the market as the lenders, banks and mortgage brokers (particularly the mortgage brokers). It’s a dirty, corrupt business and still is, with prices still being inflated over current value just to get the deal done.


50 posted on 03/28/2011 8:53:09 AM PDT by Outlaw Woman
[ Post Reply | Private Reply | To 42 | View Replies]

To: org.whodat

Realtors that are under agency are legally obligated to represent one or the other (or can be neutral). On occasion in ‘dual’ agency both sides, are being ‘serviced’ with full disclosure to each party. That’s the way it is in Missouri. But the advice regarding seeking an attorney is absolutely valid but attorneys are not looked at any more favorably than Realtors (at least that’s been my experience). Most of my clients do not wish to seek out an attorneys advice.


51 posted on 03/28/2011 9:00:09 AM PDT by Outlaw Woman
[ Post Reply | Private Reply | To 49 | View Replies]

To: Darth Reardon
Congratulations on your successful theft.

People sometimes confuse legality with morality. Legal stealing is no less immoral than the illegal sort.

I would not do it and yes indeed, I believe that makes me the better person for it.

Anybody who wants too, just go ahead and flame away, I'm not scared of F.R. members flames, it's those eternal ones, that literally scare the hell out of me.

52 posted on 03/28/2011 9:03:55 AM PDT by Graybeard58 (Of course Obama loves his country. The thing is, Sarah loves mine.)
[ Post Reply | Private Reply | To 38 | View Replies]

To: dawn53

Risk is inherent in borrowing and lending. Banks want the govt to protect them from all the consequences of losses. Screw ‘em.


53 posted on 03/28/2011 9:05:33 AM PDT by Seruzawa (Hokey religions and ancient weapons are no match for good a blaster kid.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: HereInTheHeartland

“Well not being argumentative; but what have they done to hurt you?”

Well they:

1) accepted massive bailouts from the govt
2) put us into a massive recession
3) bought numerous politicians thereby subverting our govt and the rule of law
4) failed to properly care of houses they owned in my neighborhood thereby further reducing the value of my property

The list is long. The problem isn’t cleaned up until some banks do jail time.


54 posted on 03/28/2011 9:12:14 AM PDT by driftdiver (I could eat it raw, but why do that when I have a fire.)
[ Post Reply | Private Reply | To 45 | View Replies]

To: Graybeard58; Darth Reardon

The stories of the banks illegal and immoral activities are long and distinguished.

The banks no not deal in good faith with homeowners trying to work out deals.

The banks are willing to use the law to protect themselves, why shouldn’t the borrowers? Don’t borrowers deserve equal protection under the law? Seems like I’ve read that somewhere.


55 posted on 03/28/2011 9:17:34 AM PDT by driftdiver (I could eat it raw, but why do that when I have a fire.)
[ Post Reply | Private Reply | To 52 | View Replies]

To: driftdiver

Well just a couple quick points.

Any bailout money has been repaid a large profit to the govt.
Banks did not put this nation into a recession; people pulling back from spending $$ they didn’t have is what started things.
3) every industry “has politicians in their pocket”
4) Did people complain when loans were made to make house prices go up? And what about all the other positive economic affects on the way up during the bubble times?


56 posted on 03/28/2011 9:22:29 AM PDT by HereInTheHeartland (Yes We Can, have smaller government)
[ Post Reply | Private Reply | To 54 | View Replies]

To: Outlaw Woman

It does not do your profession on bit of good to adverstise now might be a good time to buy with the market still headed south. As a note of truth, I was a member of the board realtors for years as well as the chamber of commerce, I am ashame of both.


57 posted on 03/28/2011 9:25:11 AM PDT by org.whodat
[ Post Reply | Private Reply | To 51 | View Replies]

To: dawn53

People will file for bankruptcy. The banks and mortgage companies are getting greedy over deficiency judgments.


58 posted on 03/28/2011 9:28:09 AM PDT by goldstategop (In Memory Of A Dearly Beloved Friend Who Lives In My Heart Forever)
[ Post Reply | Private Reply | To 1 | View Replies]

To: org.whodat

It is most definitely a ‘buyers’ market. Foreclosures constitute a huge percentage of the current sales trend. I’m doing a BPO now for a property in a small town and in the previous 6 month sales period, 50% were foreclosures. Stunning really.

Disgusted is what we should be; not ashamed.


59 posted on 03/28/2011 9:36:06 AM PDT by Outlaw Woman
[ Post Reply | Private Reply | To 57 | View Replies]

To: HereInTheHeartland

“Any bailout money has been repaid a large profit to the govt.”

And yet small business owners cannot get a loan. But banks will give loans to companies in foreign countries.

“Banks did not put this nation into a recession”

What the banks did led to the recession. People want to blame the govt, but the govt was only doing what the banks paid them to do.

Nobody complained when prices were going except people who were trying to buy with real numbers in mind. The banks pushed the numbers up because of the obscene profits they were making.


60 posted on 03/28/2011 9:41:10 AM PDT by driftdiver (I could eat it raw, but why do that when I have a fire.)
[ Post Reply | Private Reply | To 56 | View Replies]


Navigation: use the links below to view more comments.
first previous 1-2021-4041-6061-8081-95 next last

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson